There could be several reasons why you might want to cancel your phone contract, such as needing a new handset and being tied into your previous agreement or being unhappy with the service provided by your mobile operator.
However, it is important to note that ending a contract prematurely can carry a hefty cancellation fee.
Section 14 of the Consumer Protection Act sets out that customers are allowed to terminate their agreement before the agreed-upon expiry date.
The customer need not specify the reason for the cancellation but is required to give the mobile network operator 20 working days of written or recorded notice.
The network may then charge you a “reasonable” cancellation fee.
MyBroadband contacted Vodacom for insight into how it determines its cancellation fees.
“A quotation will be generated, and sent to the customer. The quotation includes monthly subscription costs as well as device fees multiplied by the number of months remaining on their contract,” a Vodacom spokesperson said.
“The customer will receive a standard 25% discount on their remaining subscription amount, in addition to the fees multiplied by the number of months remaining on their contract.”
Therefore, Vodacom determines the cancellation fee as 75% of the outstanding balance on your contract.
“If you do choose to terminate this Agreement during the Initial Period or a Renewal Period, you will be subject to payment of a reasonable premature cancellation charge,” Vodacom’s contract terms and conditions stated.
“A reasonable premature cancellation charge for the purposes of this clause shall mean 75% of the balance of your contract.”
The balance is determined by multiplying your monthly subscription by the remaining months of your contract. Vodacom will add any other outstanding amounts to the cancellation cost, such as bundle purchases during the month and unpaid airtime advances.
Although Vodacom’s terms and conditions specify that it requires 20 days of written notice to cancel a contract early, the mobile operator previously said that the process takes around four to seven working days.
As an example, we calculated what you would pay to cancel both a 36- and 24-month contract at different intervals.
The results are summarised in the table below. The percentage of the total value of the contract is included in brackets.
|Early contract cancellation comparison: iPhone 13 1GB + 100 minutes|
|Contract duration||36 months||24 months|
|Total value of contract||R24,084.00||R21,576.00|
|Cancellation fee: 3 months in||R16,557.75 (69%)||R14,159.25 (66%)|
|Cancellation fee: 6 months in||R15,052.50 (63%)||R12,136.50 (56%)|
|Cancellation fee: 9 months in||R13,547.25 (56%)||R10,133.75 (47%)|
|Cancellation fee: 12 months in||R12,042.00 (50%)||R8,091.00 (38%)|
|Cancellation fee: 18 months in||R9,031.50 (38%)||R4,045.45 (19%)|